Dead end pension company and mortgage

Real Estate
1

Hello,
In the Zurich canton, there is a pension company refusing to transfer funds until it had received a notarized document for a purchase process.
It is clearly a dead end for the buyer. How can he finalize the transaction before having received the funds from the pension?
What kind of document do they request, as the purchase draft is not enough? Does this mean the buyer has to make 2 notary appointments, one to sign the promise of payment and another to transfer the funds?
The first being the key to unlock the funds from the pension? If the pension still requires the final notarized document, then is there no law protecting the client?

I heard some banks are advancing the money, making the bridge until the final payment, and then receiving the money from the pension. The problem is that the bank of the buyer can’t advance the money making the situation unsolvable.
Any knowledge on this matter please? Any help will be extremely welcomed!

2

I was in this situation not so long ago, although for the 3rd pillar. But I believe it should be very similar since the “unlocking” conditions are the same.

In my case, the notary themself sent the transfer request to the 3rd pillar, with all the paperwork/stamps/whatever to prove it’s for personal home ownership. It happened before the actual property transfer.

Although, in my case, the timing was too short and the funds couldn’t arrive in time for the transfer, so I put extra cash at the time. Then I could get it back once the funds cleared.
If that had not been an option, the actual transfer would have to have been postponed until the funds were cleared.

I’m not exactly sure how it would work for a purchase. In my case I bought the land and am building on it, so I have a construction credit account, to which the funds were transferred. The notary told me they were not allowed to simply send the funds directly to me (but they only asked for an IBAN to transfer, I’m not sure they could have checked it was the correct one).

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3

That’s the general impression I got from the fund pension; however, they are supposed to help their clients buy a house.
If they are unblocking the funds in exchange of the final notarized document (transfer of ownership) or slowing down the payment and not respecting the purchase deadline, then in any case the buyer has to pay from his pocket, as you did, the remaining funds to achieve the transaction.
It’s good to know in advance, for any buyer, not to count on the money from the PK to finalize the transactions (you will get it after the transactions). Is this is against the law?

4

I have no legal expertise, just using logical thinking. According to the reports here, withholding money seems to be a wide spread practice. If it were clearly illegal, there would be court cases. After all, these are large sums of money, enforcing compliance with the law therefore would be a logical step.
Since this is not happening I therefore assume that pension funds operate within the law.

5

The pension fund may not and will not transfer the money for the new property purchase to you. The reason for this is that the law only allows early withdrawals for a home that you already own as your primary residence.

In practice, it goes like this:

  1. You get an irrevocable payment pledge from your pension fund. This is called an “unwiderrufliche Zahlungsversprechen” in German. This is more or less the same kind of document you would get from a bank that is granting a mortgage for a new home purchase. It serves as a guarantee that the seller will get their money.
  2. The property sale is completed and notarized. Since it is the pillar 2, information about the early withdrawal of pension benefits will be included in the land register.
  3. Once you are the property’s official owner, your pension fund can transfer the promised money to the buyer.

So the first step, in your case, is to submit an application to your pension fund requesting an unwiderrufliche Zahlungsversprechen by submitting their application for early withdrawal for home financing (Formular fĂĽr Kapitalvorbezug WEF).

I would assume, though, that you already submitted that application? In that case, it would seem odd to me that your pension fund would not have sent the unwiderrufliche Zahlungsversprechen or at least informed you about the process. Perhaps there was a misunderstanding?

Pension funds that are subjected to financial restructuring due to a deficit can legally refuse to pay out early withdrawals for home financing during the restructuring process. But that doesn’t sound like the case with your pension fund.

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